Abstract
Trade-weighted aggregated tariffs (TWPT) are often used in analyzing the issues of
erosion of non-reciprocal preferences. This paper argues that commonly used TWPTs
under-estimate the true protection on imports originated from preference-receiving
countries, including LDCs. When used in numerical simulations of preference erosion
and expansion scenarios, the TWPTs tend to incorrectly downplay preference erosion
effect of MFN tariff cuts, and understate the export promotion effect of expanding
preferences. In light of these claims, an alternative aggregation scheme is developed
to calculate aggregated preferential tariffs imposed by a number of developed countries
on African LDCs. These are shown to be higher than the TWPTs aggregated
from the same disaggregated tariff data set. Numerical simulations conducted with
the two sets of aggregated tariffs confirm the two claims and suggest that TWPTs may
lead to misleading policy implications concerning expanding preferences for the
LDCs.
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| Original language | English |
|---|---|
| Place of Publication | Frederiksberg |
| Publisher | Fødevareøkonomisk Institut, Københavns Universitet |
| Number of pages | 26 |
| ISBN (Print) | 978-87-92087-32-4 |
| ISBN (Electronic) | 978-87-92087-33-1 |
| Publication status | Published - 2007 |
| Series | IFRO Working Paper |
|---|---|
| Number | 12 |
| Volume | 2007 |